Anil Ambani led Reliance Communications (RCom)is suffering from huge debt and nothing seems to help them to overcome this grave problem. In an attempt to reduce the debt burden by about Rs 25, 000, company has decided to sell some of its spectrum tower and fibre network assets. Ambani also indicated that a strategic investor would be coming on board RCom but did not disclose any name.He told journalists that the new plan has the support of China Development Bank that had dragged RCom to the National Company Law Tribunal to recover dues running into USD 1.8 billion. The RCom stock rallied 35 percent on the BSE to Rs 22.01 percent after the announcement.
The company is currently reeling under a debt of 44,000 crores.RCom has struggled under a heavy debt load and has reported a string of losses during a price war unleashed by Mukesh Ambani-run Reliance Jio in the Indian telecom market. R-Com has been forced to shut down its 2G services as they had turned unviable with the elder Ambani’s company offering free voice calls and data at dirt-cheap rates. Ambani has also been focusing on reducing the debt of his other companies to concentrate on upcoming opportunities in the defence manufacturing business as well as in its engineering, procurement and construction businesses.
Reliance Infrastructure had last week signed an agreement to sell its Mumbai power business to Adani Transmission for a total consideration of Rs 18,800 crore. RInfra will utilize the entire proceeds of this transformative transaction to reduce its debt, becoming debt free and garnering up to Rs 3,000 crore as cash surplus. Once all these capex-heavy businesses are sold, the company wants to focus on the defence business under the aegis of the “Make in India” scheme being promoted by the Narendra Modi government.
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